Category: Taxes

This week a group of bipartisan Senators reintroduced the poorly named Marketplace Fairness Act (MFA), better known as the Online Sales Tax, in yet another attempt to get this terrible legislation through Congress. In 2013, the Marketplace Fairness Act passed the Senate in bipartisan fashion but the House wisely left the legislation dead on the floor. Toward the end of 2014, attempts were made to shove the bill into the Cromnibus although thankfully it did not happen. House Speaker John Boehner has said the measure is going nowhere in the House, but that didn’t stop the group of Senators from reviving it a few days ago. Keeping that in mind, TPA signed onto a letter to the Senate led by the R Street Institute and co-signed by American Commitment, Americans for Tax Reform, Campaign for Liberty, Center for Freedom and Prosperity, Center for Individual Freedom, Competitive Enterprise Institute, Council for Citizens Against Government Waste, Digital Liberty, FreedomWorks, Generation Opportunity, The Heartland Institute, Heritage Action for America, Institute for Policy Innovation, Less Government, National Taxpayers Union, and Rio Grande Foundation urging Senators to reject MFA and protect taxpayers from a massive tax increase that will do great harm to the internet economy, which accounts for billions of dollars on Cyber Monday (largest online shopping holiday each year, the Monday after Thanksgiving) alone.

One of the most important issues facing the country right now is the need for real and comprehensive tax reform. The tax code is excruciatingly complicated and Congress must act in way that will help to grow investment for American businesses, but also positively impact working families. Last week, a step in the right direction occurred when Senators Marco Rubio (R-Fl.) and Mike Lee (R-Utah) released their plan for comprehensive tax reform, the Economic Growth And Family Fairness Tax Reform Plan, or as it is becoming known as, the Rubio-Lee plan. The Taxpayers Protection Alliance (TPA) welcomes the Rubio-Lee plan and would like to see Congress take steps to working on making these reforms a reality.

The more things change, the more they stay the same. This is an oft-repeated line, especially when it comes to elected officials and policy prescriptions. Over the years taxpayers have been subject to policies that have robbed their wallets, while doing little to address the real concerns of working families. This logic is especially true for Washington and Alabama considering that the Governors of those respective states have called for an increase in tobacco taxes. Lavendrick Smith at The Olympianoutlined details of the proposal from Washington Governor Jay Inslee (D). The Washington State Senate has introduced legislation, Senate Bills 5729 and 5808, which would impose higher taxes on cigarettes and create new taxes on E-cigarettes. This would be a costly reality for taxpayers, while doing little to address the problems that Gov. Inslee is looking to fix. The increase would push the state’s tax to $3.53 per pack, making it the second highest only to New York’s $4.35 tax per pack. It is unfathomable that Gov. Inslee would lean on old failed policies that will disproportionately harm the working class, and would in turn breaking pledges made when first running for the office he now holds.

There are still many questions to be answered from the Internal Revenue Service (IRS) e-mail scandals from 2010 and 2013. But, as the investigation continues, there are other remedies being put in place to stop political targeting at the IRS. On February 26, 2015, Rep. Peter Roskam (R-Il.) did his part to curb IRS abuses by introducing H.R. 1104, the Fair Treatment for All Donations Act. This legislation will help stop the targeting of nonprofits by the IRS in the future by clarifying IRS law that any gift over $14,000 would not be subject to the gift tax. Currently, any gift that is more than $14,000 is subject to the gift tax, except donations to nonprofit organizations. These types of donations have been classified as tax free but in recent years the IRS has threatened to change that classification so that gifts to non- profit organizations classified as a 501 (c) (4), 501 (c) (5), or 501 (c) (6) would be subject to the gift tax. Roskam’s legislation would provide clarity and certainty so that the donations remained gift-tax free.

A number of states around the country have begun legislative work for the calendar year. While each state has different priorities as well as different challenges, what they have in common is that taxpayers are in need of serious relief. One state where taxpayers could soon see some good news is Florida, where a new proposal to cut taxes has emerged that could benefit wireless consumers statewide who are feeling the pain of high excise taxes on their cell phone bill. Sunshine State Governor Rick Scott is pushing a massive tax cut that will include a lowering of the state’s wireless tax rate for all cell phone users. Wireless consumers are burdened every month with a slew of taxes that provide little explanation but heavy weight to their bill. Last October, a report from the Tax Foundation found that the average taxes on wireless combining state/federal/local are just over 17 percent. The report also showed the size and scale of just how many individuals were impacted by wireless taxes noting that 90 percent of adult Americans have a cellphone, and 58 percent of adult Americans have a smartphone. Those in Florida who are a part of that overall 90 percent are now faced with the real possibility that rates could be lowered on that monthly bill, and this is welcome news that Taxpayers Protection Alliance (TPA) supports.

WASHINGTON, D.C. – The Taxpayers Protection Alliance (TPA), a national taxpayer watchdog group representing concerned citizens all across the country, criticized plans by Federal Communications Commission (FCC) Chairman Tom Wheeler to vote on new rule making regarding net neutrality and reclassification of the Internet under Title II. The new rules reflect proposed plans from the Obama Administration that would undercut the very essence of an open Internet and stifle innovation and commerce, while harming taxpayers and consumers. TPA President David Williams slammed the proposal in a statement released today: “The proposal coming from the White House and FCC Chairman Tom Wheeler is completely antithetical to the innovative nature that has been a hallmark of the Internet for nearly two decades. There is absolutely no rationale for moving forward with an aggressive regulatory approach to keep the Internet open.” Williams also talked about the harm to taxpayers and the economy, noting that, “Reclassification of the Internet could lead to new taxes, which would be a disaster for taxpayers, consumers, and businesses at time when there are already massive taxes on telecommunications.”

TPA PRESIDENT DAVID WLLIAMS: FCC ACTION WOULD HARM LOCAL TAXPAYERSTaxpayers Protection Alliance leader discusses the high-cost of government-owned broadband ahead of FCC decision

WASHINGTON, D.C. – Taxpayers Protection Alliance (TPA) President David Williams released the following statement today in advance of the Federal Communications Commission (FCC) vote whether to allow two government-owned broadband networks to expand beyond their state-mandated boundaries: “FCC Chairman Tom Wheeler will ask his fellow commissioners on Thursday to vote on Chattanooga, Tenn.’s and Wilson, N.C.’s petitions to override municipal broadband laws in their respective states. For the fiscal well being of taxpayers, and in the interest of protecting states’ rights, TPA urges Wheeler’s colleagues to uphold these state laws in Chattanooga and Wilson, which have placed prudent restrictions on government-owned broadband networks."

There have been serious rumblings that Congress will attempt to tackle comprehensive tax reform this legislative session. This is encouraging news. Even more encouraging are reports that President Obama and Senate Majority Leader Mitch McConnell, R-Kentucky, sat down and discussed the issue after the midterm elections. Senate Finance Committee Chairman Orrin Hatch, R-Utah, and ranking member Sen. Ron Wyden, D-Oregon, have even established working groups to study tax reform. And remarks from the president in his State of the Union speech last month and from Sen. Joni Ernst, R-Iowa, in the Republican response further illustrated that both parties may be willing to work together to do something when it comes to tax reform. Chairman Hatch has called tax reform “very difficult to do” and noted “we may have to do it in stages, but I think we can do it.” The last major reform of the tax code was the Tax Reform Act of 1986, and it was a bipartisan effort. For the sake of public interest, let’s hope Sen. Hatch is right and Republicans and Democrats can once again come together to make a serious run at real tax reform.

Today, the Taxpayers Protection Alliance (TPA) sent written testimony in support of Indiana Senate Bill 80, the Indiana Tax Freedom Act. The legislation would ensure "that neither the statenor a political subdivision may impose, assess, collect, or attempt tocollect a tax on Internet access or the use of Internet access." TPA has been a strong supporter of keeping the ban on Internet access taxes permanaent and we have repeatedly called on Congress to do the right thing for taxpayers and the economy by passing a permanent ban that applies to all states. SB80 would safeguard against a worst case scenario of failure to act by Congress before the ban expires in 226 days. TPA hopes the Indiana General Assembly will pass this legislation and protect taxpayers from new taxes on Internet access.

Congress has always been very good at hitting taxpayers for more revenue just when relief is finally in sight. The latest example of this nasty habit is the seemingly bipartisan urge to raise the gas tax, something that would harm many working families just as they are starting to enjoy lower prices at the pump. Under the guise of paying for the Highway Trust Fund, members of Congress from both sides of the aisle have signaled they are open to raising the 18.4 cent-a-gallon tax on gasoline and the 24.4 cent-a-gallon tax on diesel fuel. This prompted TPA and others to sign a coalition letter led by Americans for Prosperity to urge Congress to oppose any efforts to raise the gas tax.

Today, President Obama released his Fiscal Year (FY) 2016 budget. Unfortunately, this budget will harm taxpayers and do more damage to the country’s national debt. Just like Punxsutawney Phil saw his shadow and predicted 6 more weeks of winter, taxpayers will see many more years of deficit spending with the President’s budget. The bad news is that there are projected spending increases in both discretionary and mandatory accounts. “The FY 2016 budget request from President Obama offers nothing in the way of spending restraint at a time when our debt is $18 trillion and climbing. In fact it does the opposite by adding $3 trillion to the national debt between 2016 and 2020. As working families continue to make hard financial choices that are necessary to everyday Americans, the President is looking to ask those same working families to send more money to Washington and undo the spending limits he and Congress put in place only a few years ago,” said David Williams, President of the Taxpayers Protection Alliance.

Last week, newly sworn in Gov. Larry Hogan (R-Md.) released his fiscal year 2016 spending plan. Though the budget must be passed ultimately by the Democrat-controlled State legislature, the details of the first budget proposal from Gov. Hogan show that he is making moves towards getting the state’s fiscal situation under control by addressing spending. This is a step forward following eight years of the tax and spend policies of Gov. Martin O’Malley, Gov. O’Malley’s budget grew by more than $10 billion from $28.8 billion in 2007 to $39 billion in 2014. Gov. Hogan’s $39 billion budget for FY2016 puts an emphasis on spending cuts that will help save the state money to make up for the $700 million budget gap left by Gov. O’Malley.

There is probably no agency feared or disliked more in the federal government than the Internal Revenue Service (IRS). The IRS can make one phone call and wreak havoc on the lives of any working American, striking fear at a moments notice. Much of the disdain for the agency has grown in recent years as IRS bureaucrats have wasted taxpayer money on spoof seminar videos and lavish conferences, while others have been targeting political opponents in an attempt to stifle free speech. Now, the agency is complaining about recently passed budget cuts. The budget cuts the IRS is lamenting were actually passed by the House back in July of 2014, under an amendment from Rep. Paul Gosar (R-Ariz.).

The November midterm elections are in the rearview mirror and 2015 has begun with a bang, with battles on Capitol Hill taking shape on a variety of agenda items. The new Republican Senate and the emboldened Republican House have a great deal of issues on the table to be dealt with this year, but one in particular could be a major victory for taxpayers: Internet taxes. Last year was mainly filled with good news for taxpayers on the Internet tax front, but the victories were temporary, reinforcing the need for permanent solutions to ensure stability for millions of American taxpayers, consumers, and businesses that use the Internet on a regular basis. The moratorium on Internet access taxes continues to be a temporary barrier between Internet users and a flood of new taxes. The Internet Tax Freedom Act (ITFA) of 1998 was the first real protection for Internet users against taxes for accessing broadband services, created with the goal of ensuring innovation and commerce through a vibrant Internet.

On Tuesday night, the President will be giving his sixth State of the Union address to Congress and the country. After you get past all the pomp and circumstance of his arrival on Capitol Hill and shaking the hands of members of Congress, President Obama will launch into his policy agenda for the next year. The speech will not only be a preview for next year, but also be a peek into what his priorities will be and how he intends to deal with the new Republican majority in the Senate and increased Republican majority in the House. There will be opportunities for the President to reach out to the Congress to pass much-needed reform, but there will also be differences. Besides listening for buzzwords like “investment” which really means more spending, TPA will be listening very intently to the whole speech, but there will be a few issues that taxpayers should especially be listening for when President Obama speaks to the nation tomorrow night.

The latest example of President Obama’s reliance on rhetoric over substance was in full view earlier last month after Republicans reclaimed control of the Senate in the midterm elections. The President tried to use language to soften up the American electorate by speaking to the fact that, unlike the last six years, he has plans for Democrats and Republicans to work together during his last two years in office. He focused on two issues—tax reform and infrastructure improvement—precisely because they are the only pressing issues around which there is broad agreement that changes must be enacted. But, the President has fallen short on a solution for both tax reform and infrastructure by tying the two issues together. He noted, “Traditionally both parties have been for creating jobs rebuilding our infrastructure — our roads, bridges, ports, waterways…I think we can hone in on a way to pay for it, through tax reform that closes loopholes and makes it more attractive for companies to create jobs here in the United States.” His comments went on to suggest that he favors closing the gaps in the in the Highway Trust Fund with revenues from a corporate tax holiday. A corporate tax holiday, or repatriation, would allow companies to bring profits made overseas back to the United States at a reduced tax rate. This gimmick would serve to plug a temporary hole but fix none of the underlying structural issues with our tax code. With both Republicans and Democrats seemingly willing to work together, an opportunity like tax reform should not be so limited in scope.

Today is “Cyber Monday,” the busiest online shopping day of the season. And, with millions of Americans grabbing as many deals as they can from their favorite websites, there’s no better time to remind elected officials that the time is now to permanently extend the moratorium on internet access taxes; and to tell lawmakers that an Internet sales tax has no place in an ever-expanding online economy. The total tally for online shopping won’t be know for a few days, but Cyber Monday will certainly bring in a great deal of online sales to many businesses. Lawmakers should look at last year’s numbers as their guide as to why the Internet should remain free of taxes. According to data obtained shortly after last year’s Cyber Monday (December 2, 2013) online sales totaled more than $2 billion and shoppers were going online to buy with more than just a computer, according to USA Today.

(Will Rinehart is the Director of Technology and Innovation Policy at American Action Forum, this post originally appeared on the AAF website Wednesday, November 18, 2014) Under proposed changes currently being circulated by Federal Communications Commission (FCC) Chairman Wheeler the E-rate program is set to expand nearly 123 percent from 2008 levels. The program, which provides funds to schools and libraries for telecommunications services, has been the target of reform for years due to its onerous requirements. Instead of streamlining the process and ensuring that the neediest schools receive assistance, the new plan merely expands the program without the overdue reforms. E-rate is the name given to the one part of the Universal Service Fund (USF). The fund was set up in the wake of the 1996 Telecommunications Act and now has four major programs to promote access to various telecommunications services: a program for rural and high-cost areas; low income consumers; rural health care facilities; and schools and libraries. As consumers have moved away from landline telephone services and adopted wireless phones and broadband connections, the fund has come under financial pressures. Funding caps were set on E-rate at $2.25 billion in 1997, but was not indexed for inflation until late 2010. Since then, inflation adjustments have shifted the cap to $2.4 billion. Although the Chairman claims that 60 percent of “$1.5 billion cap increase represents simply a ‘catch up’ of the lost inflation adjustment from 1997 to 2010,” the cap didn’t become an issue until 2010 because the fund never reached the threshold.

Stephen Adkins is a research fellow at the Taxpayers Protection Alliance. Which governors do best at protecting taxpayers’ money and controlling state spending? That’s the questions answered by the Cato Institute’s 12th biennial “Fiscal Policy Report Card on America’s Governors.” Residents of North Carolina, Kansas, Maine, and Indiana are in good hands, according to the report card. The study finds that, while some state executives responded to widespread upticks in state revenues by lowering tax burdens on their constituents, others, predictably, have decided to go on spending sprees. » Read More

The evolution of the cellular phone has come a long way, so much so that what consumers use their phones for has become a crucial part of how many of us go about our daily lives. Unfortunately with that innovation and advancement in technology that has taken us from the flip phones of yesterday to the smartphones of today, comes a heavy tax burden from federal and state government. Regardless of what state someone resides in, they’re paying excessive taxes for something that has become commonplace in their life. On October 8, the Tax Foundation released a study that examines wireless tax rates for each of the fifty states. Joseph Henchman of The Tax Foundation and Economist Scott Mackey, authors of Wireless Taxation in the United States 2014, give plenty of information to sift through in this report.